1. Field of the Invention
This disclosure relates to the field of systems and methods for computer systems for the classification of goods. Specifically, the disclosure relates to computer systems for classifying goods for U.S. export control purposes.
2. Description of Related Art
The United States and most other countries place restrictions on the types of goods that businesses which reside within those countries are allowed to export and import. While many goods and services flow freely between countries and over national borders, certain types of materials present concerns for governments should they be provided to a foreign entity. These are generally termed “controlled goods,” and the failure to comply with the restrictions carries with it stiff penalties and the denial of export privileges.
The most obvious of these controlled goods is military hardware and related equipment. While a number of defense contractors make and sell products both to the United States military and to foreign militaries, the United States government has an undeniable interest in trying to prevent the most valuable military items from being obtained by a hostile foreign government, a terrorist organization, or another entity whose interest in obtaining such military hardware is to use it against the United States or its allies. Thus, there exists stringent exporting laws and licensing requirements for such type of goods and destinations.
While military hardware is an obvious example of an area where export controls exist, it is not the only one. Certain items, for example some precision scientific instruments, aerospace technology, electronics, pharmaceuticals, and computer technology, while not military devices per se, can also be used by a foreign government to create certain types of military hardware that the United States would prefer them not to have. The export of such items can also be controlled by the United States government. However, many of these are purely exported as commercial items without an obvious or intended military use. The export of such items, termed “dual-use,” can also be controlled by the United States government and are subject to the export regulations discussed below.
As much as the United States government has an interest in preventing potentially dangerous entities form obtaining certain items, there is also the practical reality that in many instances the sale of such items is necessary to further the Untied States' interest. For example, the sale of military hardware to strong allies is generally necessary to allow the Untied States military to coordinate with them and in some situations, to allow for the militaries to use the same hardware to improve both their actions. Further, items such as scientific instruments often have legitimate and necessary uses by certain foreign governments. Finally, many of these dual-use items are exported for purely commercial and non-military reasons.
The dual government interests in promoting most exports and regulating certain exports has therefore led to the shaping of the United States exports laws and regulations. As is often the case in legal writing, these regulations are a patchwork of different rules, regulations, and laws that have come into being at different times and for different reasons and are continuously being updated and altered. The regulations that govern export activity include, but are not limited to, the Export Administration Regulations (“EAR”), the International Traffic in Arms Regulations (“ITAR”), the Trading with the Enemy Act, the Customs Modernization Act, the Bureau of Alcohol Tobacco and Firearms Regulations, and the Atomic Energy Act (the entire disclosure of these regulations is incorporated herein by reference). As a result of the voluminous rules and regulations, keeping track of the countless export regulatory requirements can be a daunting task. This is particularly true with the two regulations that govern most export activity: the EAR and the ITAR.
Most exported goods, particularly civilian goods, are regulated under the EAR, which is administered by the U.S. Department of Commerce Bureau of Industry and Security (“BIS”). These are generally non-military, commercial, and/or dual-use goods, and many of these goods have specific licensing requirements and export restrictions. These goods are listed on the Commerce Control List (“CCL”).
A key to determining the level of export control for a particular export is determining the specific Export Control Classification Number (“ECCN”), and an exporter is obligated to correctly classify the export's ECCN to determine the associated controls. Doing so, however, is time consuming and difficult as it requires navigation through the comprehensive libraries of regulations document associated with the ECCNs. In fact, determining the correct ECCN for a particular export oftentimes requires the advice of an expert in the field of international trade—a costly endeavor. Additionally, for novice and experienced exporters alike, there is exists a significant risk and concern over mischaracterizing certain exports, particularly in regards to non-military and dual-use goods.
Additionally, although an export may appear to be a civilian item regulated under the EAR, this is not always the case. An exporter may spend a significant and needless amount of time trying to determine the ECCN classification of an export only to later learn that the export is actually regulated under the ITAR. The ITAR is administered by the U.S. Department of State, Directorate of Defense Trade Control (“DDTC”), who is charged with controlling the export of defense articles and defense services covered by the United States Munitions List (“USML”). The USML is based on an entirely different set of rules and regulations than the ECCN and is equally daunting.
Taking these difficulties together, what is needed is a system and method for quickly and efficiently determining and documenting the classification of an export under the EAR.